CASE 3: HOW CAN I GET RID OF STORAGE, CUSTOMER HAS NOT PAID

When a mover has a grossly deliquent storage customer how to remedy the situation is always complicated enough to make the mover ask:

“How Can I Get Rid Of A Storage Lot The Customer Isn’t Paying For?”

The simple answer is that, if the customer is in default for non-payment and the mover has a valid warehousemen’s lien on the stored property, it can foreclose on that lien and sell the storage lot at auction. In order to do so, the mover must document that (a) bills were sent to the customer and not paid, (b) a certified demand letter was served on the customer, (c) notice of the auction was published, and (d) a public auction was conducted, all in accordance with the Uniform Commercial Code.

However, a warehousemen’s lien is a contractual lien. It is generally not possible to prove the existence of such a lien in the absence of a written storage contract. By the time a mover has to ask how to foreclose on its warehousemen’s lien, the relationship with the customer has broken down and it is no longer possible to obtain the customer’s signature on a storage contract.

Some common errors made by movers include:

(a) failure to obtain the customer’s signature on a storage contract;

(b) obtaining a signature from a third party (i.e. the relocation service which contactedthe mover or another warehouse) rather than from the customer. Unless it can be established that the third party had authority from the customer, the third party’s signature may not bind the customer; and

(c) obtaining a signature on the Bill of Lading, which governs storage in transit, but not obtaining a signature on a storage contract applicable after the period for SIT expires.

A mover should have a signed storage contract from the day the goods enter storage, separate and apart from the Bill of Lading, since it may not be practical to get a signature after the goods enter storage. Some customers simply refuse to sign, due either to confusion or the fact they have nothing to gain by signing a second document.